Millions of multifamily apartment complexes and other rental units exist in the United States. For such units, it is a common practice for the property owner/manager to enter into agreements with the utility companies to keep electricity and/or gas always turned on at the unit, even while the unit is vacant, to eliminate inconveniences and/or the service fees utility companies may charge to turn-on and shut-off service to individual units. Additionally, property owners/managers often need utility services to remain on in vacant units, for example, to perform maintenance and to keep the HVAC system running to prevent un-desirable situations such as frozen pipes in the winter, or the build-up of mold or odor in the summer. To permit always-on or continuous service, agreements between the utility company and the property owner/manager, commonly referred to as Continuous Service Agreements (CSAs), are used to authorize the transfer of payment responsibility from owners to tenants who move-in, or to transfer payment responsibility back to the owner when tenants move-out. In most cases, the tenants of the units are responsible for establishing utility services with local utility companies as required in their lease agreements, which often require that a tenant contact their local utility prior to move-in to sign up for services and to keep that service on for the duration of their lease.
Under CSAs, until a tenant contacts a utility company and establishes service in their name, the owners will typically be responsible for payment of those utility services—even though the tenant still occupies the unit. Also, later when a tenant contacts a utility company with a false move-out date prior to vacating a unit, the owners again will be responsible for payment of those utility services under the CSA. Because the average turnover for tenants in multifamily units is high, the use of a CSA exposes property owners to a significant amount of utility-related expenses when a tenant reports a false move-out or fails to take responsibility for utility charges after move-in. Although this problem applies to many multifamily units, the problem also exists for any leased space where arrangements such as CSAs exists and a non-owner tenant is responsible for utility service charges. Currently, when a multifamily unit tenant fails to apply for a utility service under their name, the property manager or owner will receive the utility bills for the occupied units, and it may take 45 days or longer before the owner becomes aware that the tenant has not established service in their name. The property manager or owner must then go through the tedious and complex task of matching bills for occupied units with tenants, which requires the correct information to permit a property manager to identify the tenants that owe money for utilities. This task of cost recovery based on utility bills is made even more difficult due to unit turnover because utility bills often apply to utility service consumed months earlier, and tenants within a particular unit may have already moved out. Often the situation goes un-noticed for months and results in loss of income for owners and property managers. Furthermore, in the event that tenants call their local utility company and ask for a disconnection or shut off of service under their name before moving out, owners can become prematurely responsible for utility expenses that should be paid by the tenant.
In recent years some multifamily owners have outsourced the identification of utility recovery to third party service companies that match utility bills with tenant data received from property owners and provide multifamily tenants with a recovery bill. This type of service is known as Vacant Cost Recovery (VCR). VCR bills are typically available 45 or more days after the usage service period, and the utility recovery process is generally only available for those tenants who fail to enroll for service at the time of move-in. When tenants report a false move-out date to the utility within 45 days of their actual move-out, the utility bills for units may go un-recovered because the bills are not received until after the tenant has vacated the unit. As such, these utility recovery processes lack the ability to identify potential cost recovery opportunities on the back end or at the time of move out. In addition, standard utility recovery methods report move-in violations approximately 45 days or longer after the violation, putting pressure on multifamily owner's cash flow since utility bills are paid to utility companies before utility recoveries are collected from tenants. Therefore, a system and method is needed to quickly identify utility theft by tenants who are or who will be receiving services for which the owner may incur costs.